Vinfolio.com

The World of Fine Wine magazine' s latest issue (#19) contains a must-read article called "Every one a critic: The future of wine writing."  Mike Steinberger provides a fascinating, state-of-the-market assessment of what he references as the "twilight era" of Parker.  He makes many valid observations about the inroads being made by what are essentially lower-cost (often free) substitutes for professional (fee-paid) wine criticism.  What's going on and how can the professionals respond?

The "good enough" effect enabled by the Internet

Several trends are at work to shrink the size of the "fee-paid" wine criticism market. There's no question that the Internet has provided a platform for talented amateurs via blogs, forums, and community review websites (Note: Vinfolio is introducing community reviews in our upcoming version of VinCellar).  Many of these reviews (although typically free) can be on a par to those of a professional critic's.  Pragmatically, free amateur reviews need only be "good enough" for the reader to substitute for a paid review.  Moreover, if an individual amateur reviewer is prolific enough and/or focuses his reviews on a particular category of wine, regular readers can calibrate their palates in the same way they do with professional reviewers.

What will happen to the fee-paid wine criticism market

Despite increased competition, there will always be a market for fee-paid wine criticism.  Quality in most areas of life is worth paying for and there's no question that the mainstream professional critics are highly talented.  Moreover, the cost of "paying" (typically $75-$125 annually) is relatively modest compared to the cost of a buying mistake.  However, the "business model" of the professional wine critic may need to evolve to maintain their income.

Advice for professional critics

The theme to my advice is to become more aggressive in disseminating one's professional content to combat the rising "noise" levels.  This can be done in a controlled manner while developing new sources of income to the critic.  Here are some ideas to consider:

1. License content to wine websites and online services -  Vinfolio pays annual fees to Steve Tanzer, Allen Meadows, Roy Hersh, and Richard Juhlin for licensing their wine reviews for specific uses within our free VinCellar cellar management software and within our ecommerce site.  Certain access to full text reviews requires a separate paid subscription to the reviewer's site so we can help drive new consumer subscriptions.  As we expand the utility (uses) of a paid subscription beyond the reviewer's own site, I'd argue that we also increase subscription renewal rates.
2. License content to retailers - If consumers are more reluctant to pay, maybe members of the trade who rely upon the reviews to help sell wine will not be.  Right now, the trade must manually cut-and-paste reviews from the professionals' websites (or otherwise enter data) for what may be thousands of items.  These reviews may need to be refreshed if a review is later updated.  If these reviews were available in an automated way via an electronic API, I believe many retailers would pay material annual fees just to obtain the labor savings.
3. Create foreign language editions - Asian markets are emerging as major wine buyers. Why not offer a Chinese language edition?
4. Generate advertising revenue - Sell online advertising to support access to selected free content.
5. Go "on tour" - Wine critics are analogous to rock stars.  Even if the music (content) is free, fans (readers) pay heavily to attend concerts (wine events).

I could go on but you get the idea.  What would you do if you were a professional critic in this situation?

While the basic economics of supply and demand affect pricing of any good, for items marketed globally such as fine wine, significant shifts in currency values in major markets will take their toll.

"Cannot take it any longer" 

Yesterday, Reuters ran a story titled Burgundy wine prices hiked in U.S. due to weak dollar (read it, it's short).  Prices are being raised 10%-20% in the U.S. (the second biggest Burgundy market after Britain) as "they cannot take it any longer."

Just how much as the dollar weakened?

The dollar has depreciated 19.6% against the Euro since the beginning of 2007 and 26.5% since January 2004.  Given that the dollar fell 10.7% against the Euro in 2007, its decline in Q1 2008 has accelerated. 

The broader impact of the weak dollar on wine prices

• Domestic wine will become better values relative to imported wine (although certain items used in making some domestic wines such as French oak barrels have increased dramatically in price).
• Domestic U.S. retailers will increase their efforts to sell wine abroad.  See my post from earlier this week, Vinfolio to open Hong Kong operations.
  
• Foreign buying in the U.S. will increase (including European wines being sold back into Europe).
• Foreign investment in the U.S. wine industry should rise.

Bottom line: Fine wine prices are set globally and are on an upward trend given that rising demand is outpacing new supply (see Why fine wine prices will keep rising).  Fundamental shifts in currency values will cause supply to shift to other markets as well as new opportunities for those paying attention and able to operate globally.

P.S.    Today is the last day to vote for this blog in the 2008 American Wine Blog Awards.  Read about it and vote. 

The Hong Kong government just dropped duties on all alcoholic beverages, effective immediately (see story).  The duty on wine had been 40% after having been cut from 80% the prior year.  Financial Secretary, John Tsang, is betting on the behavior of free markets to turn this into an economic win for Hong Kong. 

Hong Kong destined to be Asian trading hub for wine? 

By forgoing approximately US$72 million a year in duties on all alcoholic beverages, Tsang commented that he expects wine-related trading activity may increase by as much as US$500 million.  In particular, the historic status of Hong Kong as a trading hub has been reinforced and this move places Hong Kong in a position to capitalize on its current lead as the center of wine in Asia.  Meanwhile, neighboring Macau, the new center of global gambling, has a 15% wine duty and mainland China's wine duty remains at around 50% (plus bottles are at risk of being "sampled" -- which effectively kills importing small quantities of rare wines).

Other Implications

1. More foreign wine business will open offices and expand activity in Hong Kong.  As previously noted, I'm traveling to Hong Kong on a previously scheduled trip this weekend to explore business opportunities.  Acker Merrall & Condit just announced a few days ago that it is launching wine auctions in Hong Kong in May.  The London International Vintners Exchange (Livex) has indicated its intentions to open an office if duties were dropped.
2. Further upward pressure on fine wine prices - In April of last year, I wrote a post titled "Global factors affecting trend for higher fine wine prices."  In it, I noted that the lowering of duties will drive more demand, which in a relatively fixed supply market for fine wine, supports longer term price rises.  While Hong Kong's economy is relatively small, it could easily become the "funnel" for wine purchases from wine collectors in nearby high duty countries.
3. Hong Kong wine storage facilities will boom - Hong Kong has limited local storage facilities for wine collectors. In fact, many local wine collectors are known to store their wine in London.  Expect much of this wine to return to Hong Kong for storage where it will be more easily accessible by its owners.  Hong Kong should also become the logical wine storage depot for wine collectors in nearby countries for the same reason.

1. How should we market Vinfolio in various regions to build awareness?  Are there logical partners to team up with?
2. What are the practical issues in selling wine to customers located in these markets without a retail storefront (in addition to duties and customs)?
3. Is there an opportunity to act as a wholesaler to other retailers, especially for older vintages of collectible wine?
4. How are other international wine retailers/wholesalers approaching the market?  What are they doing right and wrong?
5. Would it make sense for Vinfolio to consider opening an office in Hong Kong (or elsewhere in the region) to better serve customers?  Or is having a salesperson based in San Francisco making regular trips a viable approach too?

Overall, I am interested in learning as much as I can about how the market operates so that we can make informed decisions about how to best serve the market opportunity.

Setting up a meeting

If you're in the trade or a wine collector and would like to meet me during my trip, please feel free to contact me directly via my office or at steve@vinfolio.com.

The annual Hospices de Beaune charity auction held each November is widely viewed as a leading indicator for pricing of the new vintage (2007 in this case).  If you thought Burgundy prices couldn't go much higher, brace yourselves!  Red Burgundies rose by 38% and overall prices were up 27%.  White Burgundies did not rise as much but that might be because they were up 65% in the prior year.

More details on the 147th annual auction

• 607 barrels were auctioned, down 11% from 680 barrels in 2006.
• Of the 607 barrels, 469 were red and 138 were white.
• The minimum purchase is a single barrel.
• 42 cuvees were offered: 30 red and 12 white.
• One cuvee was new in 2007: Corton Clos du Roi, Cuvee Baronne Du Bay
  
• 22 different growers cultivate 2.5 hectares each (1 hectare = about 2.5 acres) for the Hospices de Beaune domaine.  Each grower produces one or more cuvees.
• Each barrel yields 24 cases of either 750ml or magnum bottles.  The purchaser receives the bottled wine with the Hospices label.
• According to Christies (who has run the auction for the past 3 years), there were "many new clients from Asia, Australia, America, and Europe sending pre-sale orders and bidding by telephone and the Internet."
• The $6.81 million proceeds from the auction provides medical equipment for the local Beaune hospital and covers the cost of maintaining historical monuments.

Bottom line: Be prepared for price hikes on 2007 Burgundies.  From an investment point of view, high-end collectible Burgundies always seem to me to be a pretty safe bet given that consumers worldwide can't get enough and are growing in number.

Photo note: Upper right is the Hospices de Beaune and its famous roof. Below is a sample label image.

It's simple.  Just make an effort -- the latent demand is there.  Decanter.com's recent story, "Bordeaux properties on major China, India tour," contained several factoids that got my attention:

1. The 120 Indian and 150 Chinese buyers and importers materially outnumber the visiting Bordeaux contingent of 80 professionals.
2. Only 20% of the Indian wine market is foreign-sourced.  This is unnatural and caused simply by ridiculously high import duties. 
3. The Chinese market for imported wine is growing 40% a year!

The demand for collectible wine, at least from China, is already surging and over the long term, both China and India will help ensure prices stay high.

P.S.    See my prior post, China's long-term impact on the fine wine market. 

Vinfolio announced today that we've completed a $4.5 million financing in what is the second round of outside capital raised since inception (see full press release).

From our customers' point of view, there will be numerous benefits which result from this capital infusion:

1. More supply of hard-to-find fine wine - The pace of our private cellar acquisitions through our personal selling service continues unabated (e.g., two cellar purchases this week total over $1 million).  About 60% of our retail sales are now supplied from this channel which is often the only way to obtain many fine wines that were either highly allocated upon release or which are no longer offered from trade sources.
2. VinCellar and website enhancements - Roughly 20% of Vinfolio's staff are Java software developers which we further supplement with numerous specialist consultants.  As a business which is 100% online, we need to be innovators and stay in front of competitors with our website and VinCellar functionality.  Numerous major developments are under way which will be released over the coming months.  Moreover, as we raised $1 million more in equity than we had targeted, we plan to expand even further our previous aggressive plans in the software arena.
3. Even finer service - Vinfolio's guiding principle is "Fine wine, finer service."  Good service in any business is usually driven from the top (that means me in this case!) and it depends on investing in people and systems to provide responsiveness, convenience, and certain self-service capabilities.  If you have suggestions on how we can improve our service, please email service@vinfolio.com and put "Service suggestion for Steve" in the subject line.

To all of our customers, thank you for getting us to this point and we appreciate your business.  If you're reading this and are not currently a customer, visit our site and see what you're missing.

Wine Opinions, an Internet-based wine research company, published a report last month titled "Tracking wine media usage and the Influence of Critics."  The report, which includes both trade-only and consumer panels, makes fascinating reading but here are some key findings which struck me as particularly interesting (based on consumer-only responses):

• The most influential opinions affecting consumer retail wine purchases over $20 (the highest category) were "wine-knowledgeable friends" (72%) followed by retail staff (61%).  See chart below.
• The Wine Spectator (54%) has more influence than Robert Parker (41%) amongst high price point consumers.
• 24% of consumers in the panel read wine blogs, about double the level which read the Wine Advocate or eRobertparker.com.
• 87% of consumer respondents agreed with the statement "I trust my own taste more than I do the wine critics."  Despite that, 49% agreed that "I try hard to avoid wines with poor ratings."
• Interestingly, most consumers (42%) disagreed with the statement that "There is a big quality difference between a wine related 92 points and one rated 88 points."  Note: another 39% were undecided on this statement. 

My conclusions

• Initiatives to apply social networking to generating wine recommendations should have a receptive audience.
• Internet-based wine opinions contained in blogs or shared tasting notes are already a significant influence factor and growing stronger based on a steady flow of new initiatives.
• The role of expert wine retail staff is valued highly.
• Consumers trust their own opinions more than anyone's and apply their own judgment in terms of how they use third party ratings to make their decisions.
  

The full 32 page report containing charts, analysis, and the original survey questionnaire is available for purchase at the Wine Opinions Store for $195 (it is report CT4-1).

It's been 11 days since my last blog post because traveling back and forth to Europe, the impact of jet lag, and virtually non-stop Vinfolio meetings in London and Bordeaux (not to mention a few nice dinners), eliminated any opportunity to write.  Having returned yesterday, I thought I would share a few insights and observations that stuck with me:

• The European wine entrepreneur is alive and well.  Our meetings were mostly with smaller companies (in people terms) but many had substantial revenue and most forecasted growth rates for the coming year of between 25% and 40%.
• No wonder it's expensive.  "We sell all of our Domaine Romanee-Conti wine allocation directly to Japan." -- source: a large UK wine merchant.  In general, fine wine seems to be finding its way to the highest global bidder.
  
• Chateau buy-backs? - Bordeaux chateaus routinely buy back prior vintages held in stock by UK merchants to resell (sometimes as official "ex-chateau" stock) -- source: multiple members of the UK wine trade.  This occurs in part because the whole en primeur system of futures is totally focused on selling through every vintage upon release with little held back -- most producers simply can't afford to do otherwise (perhaps this will begin changing with cash from 2005 in their pockets).
• UK's tax-free wine investment gains - Capital gains from investing in wine in the UK are promoted as a tax-free investment opportunity.  The underlying support for this is that wine does not normally survive for more than 50 years which classifies it as a "wasting chattel" and not subject to UK gains tax.  Port doesn't qualify for tax-free treatment and clearly many fine wines shouldn't either.
• Investing in wine is far more common in the UK compared to the U.S. While the tax treatment may be one reason, the UK wine trade more actively promotes wine investment than U.S. merchants do and the average UK consumer has "grown up" with Bordeaux which has a proven history of long-term value appreciation.
• Low high-end California wine interest - California/U.S. wine is considered part of the "New World" wine category along with Australia, New Zealand, etc.  (I guess it's all relative.)  UK wine trade members report little interest in high-end California wine; certainly below even my low initial expectations.  Perhaps it's better that way for the rest of us who know better.

In mid-March, a Chicago-based  freelance writer (Michael Austin) called to ask what I thought was behind the rise in wine's increased popularity.  His story, Aging Well - Heard on the Grapevine: Americans' Wine IQ is Soaring (free registration required), appeared in the April 29, 2007 Chicago Tribune Sunday Magazine.  Here’s a more in-depth summary of what I replied:

1. People want “experiences” - Drinking wine is a sensory experience, like food, and wine offers a wide range of experiences based on different choices in grape types, regions, and wine-making styles.
2. Affordability - Despite higher prices for collectible wine, wine is broadly affordable relative to other types of “experiences.”
3. Quality is up - The average quality of wine has improved at all price points, particularly among lower-priced wine options.
4. Greater purchasing access - Access to a diverse selection of wine at competitive prices has been facilitated by the Internet and direct shipping.  The historic dependence on what's often a more limited local selection at higher prices no longer exists (in most states).
5. Consumption is growing rapidly - Per capita wine consumption is on the rise with a 17% increase from 2005 to 2006 according to the Wine Market Council of St. Helena (in Napa Valley).
6. Enjoyment factor - Wine preferences are highly subjective and personal which helps drive debate and conversation amongst friends, creating an “enjoyment factor.”  In general, wine has become part of many people's lifestyle.
7. Socially acceptable - Drinking wine is more socially acceptable than ever as historical pretensions surrounding wine have largely dissipated with broader market acceptance.
8. Health benefits - The health benefits of wine consumed in moderation relative to other forms of alcohol have become clearer in the past 5 years.
9. Proliferation of wine cellars - A “wine cellar” (either a small cooling unit or a custom-designed room) has become standard issue in new mid-to-upper-end home construction.  If you have one, you need to learn about wine to know what to fill it with.  See my prior post: 4.3 million wine “cellars” in the U.S.
10. Celebrity “endorsements” - The “celebrity factor” has helped popularize wine, whether the celebrity is a winemaker (akin to celebrity chefs) or TV/movie celebrities profiled in Wine Spectator or other publications.

What are your theories explaining wine's increased popularity?

A couple of news stories in the past month focused my attention on the potential impact of unleashing pent-up global demand for fine wine that is now impeded by high import taxes.  Specifically, Hong Kong decided to cut its wine import duties in half and South Korea concluded free trade agreement negotiations with the U.S. which look likely to result in a complete elimination of its high wine import duties (see Korea Trade Agreement Moves Forward: Wine Industry to be a Major Beneficiary).  As pricing is about supply and demand, sudden reductions in taxes could cause demand to rise in a world of relatively fixed supply of fine wine.  

See the chart below for a quick overview of major Asian countries' wine import duties in comparison to the U.S.  The basis of import duties and taxes varies by country, ranging from the value of the wine to volume and alcohol levels.  The data below is based on a single case of wine valued at $1,200.  While Hong Kong's and South Korea's dramatic future tariff reductions are impressive, their economies are relatively modest.  The bubble size in the chart represents the relative GDP among the countries shown, and therefore the potential purchasing power which could be released to impact wine prices.  The two countries combined represent less than 5% of the U.S.'s GDP so the planned wine import cuts are not going to redefine price levels on their own. 

"What if" scenarios for China and Japan

1. China - What's more interesting perhaps is China's high duty combined with its purchasing power (about 60% of U.S. GDP and growing faster).  What if China were to cut its 49% duty to zero?  Given the growing number of millionaires in China (now in the 300,000-400,000 range), you can bet a such a change would impact fine wine prices (see my other recent post, China's long-term impact on fine wine prices, and Selling wine to the affluent Chinese).
2. Japan - Japan's fine wine market is already very strong and while a reduction of 15% is much less than 49%, one can imagine a more immediate impact given the far more established channels of selling fine wine into Japan.

A news item on Decanter.com last week titled "Yquem goes into nebuchadnezzar" notes that Yquem is creating a limited series of 120 of these 15 liter bottles for the highly-touted 2005 vintage.  This marks the first time in the long history of Chateau d'Yquem (since 1593) that this bottle format, named after a King of Babylon Nebuchadnezzar II, has been used.  Until now, the largest bottle format available has been 6 liters which only began in 1982.

The facts

• 120 15L bottles to be produced: 20 to be retained in the library of the Chateau
• 100 of the bottles to be sold via Bordeaux Wine Investments (BWI, UK-based) and Bordeaux Wine Locators (BWL, US-Based), which are sister companies owned by the same sole shareholder.
• The BWI/BWL's price per bottle is €12,850 (about $17,100)
• The wine will be bottled during the first quarter of 2009
• The Wine Spectator has scored the wine its highest possible rating in barrel which is 95-100.  Robert Parker has yet to rate it but in writing about the 2005 vintage, he said the 2005 Yquem "should be utterly amazing when released" given that it is a "towering example of profound Sauternes."
  
• Each bottle is etched and engraved with a bottle number.  Bottles will be presented in a special wooden presentation case.
• The names of the 100 buyers will be drawn in April 2007 at the Chateau, providing each purchaser with the opportunity to own bottle #1.
• Special glass was needed so that it would not yellow over an extended aging period.
• Two people are needed to handle a bottle given its weight and size.
  
• Special Styrofoam shipping cases are to be used for delivery.
  

Why now?

I decided to email Robert Lench, Managing Director of BWI, to ask if he knew what the motivating factors were behind the decision to produce 15L bottles.  Here is his response:

"The idea was conceived and initiated by my brother, Andy Lench [the owner of BWI and BWL]. We believed this would be a unique format for the greatest Sauternes in the world in an historic vintage, the 2005. The 2005 has received a generally high profile and acclaimed as one of the greatest Bordeaux vintages. A very special bottle for both investors and connoisseurs. This is a high profile opportunity to have a piece of history."

Apparently, the market seems to agree as there are less than 10 bottles left for sale between the two companies.

Other questions you might ask

1. How do I buy one? The bottles are only available through retailers except in the UK where an individual may buy directly from BWI.  Or just email service@vinfolio.com and we'll try to snag one for you.
2. Does this portend a new supersizing trend for Bordeaux?  Robert Lench did not think so.  This concept was something they initiated as wine merchants.
3. How much of Yquem's typical production is being diverted to the 15L format? About 65,000 bottles (750ml size) are produced annually.  The 120 15L bottles (20 750mls in each) translates into the equivalent of 2,400 750ml bottles or about 3.7% of annual production.
4. What is the price premium compared to the 750ml bottle format? $675 is the median 750ml price based on 23 U.S. retail prices taken from Winesearcher.  Using $17,100 as the minimum price one could pay, this equates to $855 per 750ml equivalent or about a 27% premium.  Two different U.S. retailers have both offered the wine at $20,000 which would be a 48% premium.
5. Would this be a good investment? My guess would be "yes" given the quality of the vintage and the producer, the limited number of bottles produced, rising global demand for top wines, the unquestioned sourcing of the wine, and the ability to prove the authenticity of the wine over time (via etched bottles and other certification).  The fact that over 90 have already been sold tends to confirm my guess.

China's growing thirst for wine is likely to drive fine wine prices higher over the next few decades. 

The March 5, 2007 Newsweek (International edition) contains an article titled "Bordeaux meets Beijing" and the February 28, 2007 edition of the Wall Street Journal weighs in with its own story on the Chinese wine market titled "'People I know still put ice and juice in wine'" (WSJ online subscription required).

Here are some items drawn from these articles which grabbed my attention:

1. Chinese per capita wine consumption doubled in the past 5 years but is still only 0.7 liters per person (equivalent to 1 bottle).  In comparison, the U.S. is third in per capita consumption with 14.5 bottles per year (see my post: 92% of wine consumed by "core drinkers") while France and Italy are about the same with 63-64 bottles per capita consumption each.
2. In 2005, China became one of the top 10 wine consuming nations (in absolute terms).
3. Chinese wine imports in 2006 (2.2 million cases) doubled 2005's level (1.15 million cases).  Since 2001, wine imports have grown from $32 million to $133 million.  The WSJ story also states that "wine experts think that one day, the high end of China's wine market for imports could match America's, valued at over $2 billion."
4. The Chinese government is actively encouraging wine consumption for health reasons over grain alcohols.
5. Taxes on many wine imports fell from 120% in 2001 to 48% today.
   
6. Wealthy Chinese buy the most recognized wine names (at very high prices) as a bit of a status symbol more than for the taste.  Sounds like an opportunity for Robert Parker to publish a Chinese language edition of The Wine Advocate and encourage more experimentation!

1. Per capita wine consumption in the U.S. is up 17% from 2.46 gallons in 2005 to 2.88 gallons in 2006. That's great but who uses gallons as a metric for wine consumption (unless it's plonk)? In 750ml bottle terms, that's an increase from only 12.4 bottles to 14.5 bottles per year. It seems low to me but it's enough to rank the U.S. third after Italy (12.8 gallons or 64.6 bottles) and France (12.5 gallons or 63.1 bottles).
2. 30% of the wine sold in the U.S. is through the restaurant channel. Wine collectors should care because fine wine is often allocated to restaurants for market exposure purposes and is therefore not available to buy through retailers or directly (at more affordable prices).
   
3. 20% of core drinkers bought wine via the Internet in 2006. In 2000, this was only 5% bought wine online. Wine is a consumer good so it shouldn't be surprising that consumers will use the Internet for more convenient and cost effective buying like they do with other items. Now if only state legislators would recognize market realities and revamp the direct shipping laws to accommodate market demand. At some point, consumers (aka voters) will make it happen with or without them.

"A 2005 Association of Home Appliance Manufacturers study found that 4.3 million households in America now have wine cellars, with more than 3 million purchased since 2003."

Wow! That’s a lot of households who cared enough about their wine to purchase a dedicated “appliance” to protect it. I suspect many will catch the wine collecting bug once they take this initial step. Hopefully, they will start reading this blog and managing their wine with our free VinCellar online cellar management software.

P.S. Please see my prior post "Wine cellars: Beauty over function” for comments on the custom cellar market.

The real question is why haven’t online wine sales been more robust and clear market leaders emerged? The constraints seem to be:

1. Restrictive interstate shipping laws that differ by state essentially create trade barriers for national retailers. Deep-pocketed wholesalers want all alcohol transactions to be face-to-face and have lobbied heavily to keep or tighten restrictions further. The creation of the Specialty Wine Retailers Association in early 2006 is dedicated to changing these laws for the benefit of consumers.
2. Risk of minors purchasing online. New services for online age verification such as Idology’s will increasingly be adopted by wine retailers (including Vinfolio) and defuse this argument by wholesalers once and for all.
3. Fragmented industry. The wine retailing industry consists primarily of family-run, privately owned business that tend to be risk averse and laggards in applying the latest technology to their business operations. The inability to sell easily across state lines in itself has stunted the development of larger players.
4. Perishable nature of wine. It’s simply more complicated to deal with the logistical aspects of handling and transporting wine than books or electronics.

Bottom line: Online wine retailers are making progress and a future of “wine without borders” is achievable with a sustained effort. Wine collectors should support legislative changes in their home states to facilitate development of a true national wine market.

It’s not news that there’s a lot of undifferentiated wine made worldwide that producers can’t sell and whose suppliers might be “desperate” to unload. This is the normal state of affairs. Therefore, statements like “markdowns nationwide have made this the best time to stock up in more than a decade” are a bit overreaching. Most of this wine is low-priced “plonk” and certainly not worth cellaring with any expectation of improvement.

Even the comment that “prized vintages once available only to restaurants and collectors are suddenly in plentiful supply (albeit still at relatively high prices)” doesn’t fit our experience. We have to press suppliers constantly for larger allocations of desirable wines (or be forced to consider “parcels” of undesired wine to get what we really want – usually we just pass).

I suspect the Cakebread Vine Hill Cabernet mentioned in the article (which retails for $90-$100) was “tied” to Applejack Wine & Spirits' purchases of other Cakebread wines. Or maybe it’s just hard to sell a $90-$100 cab without a critic’s review (the last published review I could find was an 87 from Wine Spectator for the 2000 vintage).

Bottom line: The “bargains” in lower-priced wine will never disappear. Take your time and fill your cellar with high quality selections.